Hey everyone, welcome in to another daily editorial here on the KE reports.
I'm getting an update from Volt Lithium, again talking with the president and CEO Alex Wiley, traded on the TSX Venture Exchange under the symbol VLT and on the OTCQB under the symbol VLTLF.
And we are recapping the most recent news release from November 6th.Volt Lithium announcing continued operational success at the field operation unit here in West Texas.
Last time I chatted with Alex, we discussed how this DLE, direct lithium extraction field system, was capable of producing battery grade lithium.
from oil field brines now we're talking about this operational update where the company has cut down its processing time fourfold to under 30 minutes the last report we had was right around two hours.
So Alex, this just goes to show that this DLE technology seems to be working with these oil field brines and bringing down the processing time, I assume means you can produce more and potentially could lower costs.
So take us through the importance here of bringing down this process time, please.
Corey, this has been such a big catalyst for Volt cutting down our processing time.So
Effectively, where we were at in the summertime was what we did from the time we received our strategic investment to the time we put the unit in the field, we did a 100x scale-up.
We've got a system that's operating in the field that we scaled up 100x.What does that mean?It processes 1,200 barrels a day of oilfield brine based on a two-hour cycle time.
What we've achieved in the field since September is we've cut our processing time down from two hours to 30 minutes.So that same 1,200-barrel day unit is now capable of 5,000 barrels a day.That's really important for us.
If we can have a shorter cycle time, we process more volume through our system.
Now, Alex, explain to us exactly what you are producing on the back end here with this lower cycle time.What is the product on the back end right now?
Today in the field, we produce a lithium chloride concentrate.Now that lithium chloride concentrate is what we do from that lithium chloride concentrate is we create battery grade lithium carbonate.
Today, we're producing that lithium chloride carbon or that lithium carbonate at our field simulation center in Calgary.We have been organizing the procedures.We've started the carbonate production at our center in Calgary.
We are ironing out the procedures so that we can move our carbonate production from the field simulation center to the field by the end of the year.
So what would go to market here?Could you sell that lithium chloride concentrate?Or is that more the lithium carbonate that you need to produce after, again, producing the chloride concentrate from this water?
So we're in discussions with a number of groups to potentially purchase our product.And what we're seeing is that there's a lot of optionality in terms of the type of product that we're selling.
Our preferred product today would be battery grade carbonate at 99.5%.
However, there's also the ability to sell product either at a technical grade or an industrial grade, or maybe even a lower grade, or it's really going to depend on the price we receive.
But job number one is we have produced, we're sending samples out of lithium carbonate that's battery grade purity.
OK, that's job number one.Job number two, I assume, is scaling up then.You've told to me that this is a modular system.
So how quickly, how easily can you add modules to this system, considering the amount of water you have access to from this oil field?
So I think let's just take a step back.And what does the system look like?What does the infrastructure look like?So when I look at the infrastructure in Texas, You've got an oil and gas producer that produces a barrel of oil.
Now with that barrel of oil that they produce, they also produce water.Up to four barrels of water gets produced with every barrel of oil.They can't sell that oil until they dispose of the water, and that's a key thing.
So what we're seeing in Texas is that there's a sophisticated system of pipelines It goes from the pump jack to a pipeline to a tank farm to disposal wells.
Where we get involved in the system is at the tank farm level just before disposal, and that's really important.We've got the capability to match the tank farm capacity.
We see tank farm sizes anywhere from 30,000 barrels a day up to 200,000 barrels a day.
If we're tying into a system that produces 30,000 barrels a day or disposes of 30,000 barrels a day, today we would need to produce, based on what we're doing today, 6 modular units.At 100,000 barrels a day of disposal, that would be 20 units.
Our target is to continue to scale up so that we can run anywhere from 7 to 10 module units per tank farm.At that 30,000 barrel day tank farm, we're scaled up today.
On the larger ones, we may do a little scale up so that we can just manage between 7 and 10 module units, but we don't have to.
Our target now is taking what we've learned in the field with our improved processing times and move to an automated system on 24-hour production. Our target, we wanna be producing between five and 10,000 barrels a day consistently by end of year.
Okay, hey, that's only a couple months.So you are moving fast here.How much access to water, these oil field brines do you have?Is that going to be an issue?
We don't see it as an issue.Our partner moves a lot of water every day.In the Permian alone, There's 19 million barrels of water that get disposed of on a daily basis.
This is the largest amount of volume of water that I've seen anywhere in North America by a long shot.We do not have an issue with scaling.There is a lot of water being disposed of in the Permian.
Our job is let's get ourselves producing continuously so we can set ourselves a scale up as we move into 2025.
So Alex, do you just scale up with your current partner here?Do you look to other partners?Do you need to test this DLE technology, this field operation in different type of operation setting?
Today, we're very happy with our partner, and we see an opportunity to scale with our partner. However, we see lots of opportunities out there.
I think the job number one for us today is to focus on getting ourselves automated, getting ourselves producing, and drive the direction from scaling up after that.
So big picture.When do you start creating cash flow?Do we simply need to wait for some news on an offtake agreement?Do you still need to get this whole automation so that you can produce this lithium carbonate?
What does the path to cash flow look like?
Well, I think what we do is we start with cash generation and cash generation means we're building up an inventory of product as we speak.Every day we create more inventory as we get ourselves set up for automation.
So I see an opportunity to start selling our inventory.We're having discussions today.We'll just have to see what it looks like, but we're very comfortable that we're going to start selling.
We might sell product towards the end of this year, early next year.We're looking at a lot of optionality.Really, the cash generation will drive what this business looks like as we move in 2025.
We've talked in the past, we expect to be in a cashflow.So cash, you know, positive cashflow as we move into this second quarter, late second quarter of 2025.
Again, relative to what we've seen from anyone else, that's a schedule, that's a target, that's an achievable target.We need to get to cashflow.We wanna drive cashflow so that we can continue to scale up the business.
How is the company doing for cash?Do you need to get to cash flow because you're running low?Or are you okay?Can you just keep funding these operations currently and find the right deal?Are you in any rush here to get to cash flow?
I mean, we're going through a lot of discussions with our partners about how we scale up and what that looks like.And we're looking a lot of options.I mean, The reality is our partner is a lot bigger than us.I mean, Bolt is a small company.
So we're looking at things so that we don't dilute the shareholders moving forward.We've got a plan.It's predicated on let's get ourselves automated.And again, when I look at deliverables that have happened in 2024, we've come a long way.
I look at if we were If we take the clock back to March or April of 2024, we were talking about, we need to find a strategic partner.We checked that box.Then we talked about, we've got to get a unit to the field.
In order to get to the field, we got to scale up.We did a hundred times scale up.Then we got to the field.We got to make sure it works in the field.We've scaled, we've, you know, increased our throughput by a factor of four since September.
So there's a lot of deliverables that we've hit.We want to continue hitting deliverables so that we can scale up.When it comes to financing, we're looking at all kinds of flexibility.Does our partner put in a credit facility?
Do we scale up a little bit slower?What I can tell you is both parties are motivated to scale up in an efficient manner.And our partner wants a healthy vault, meaning Don't dilute Volt.If you're going to scale up, it's going to cost $25 million.
Volt doesn't need to go out and raise $21.5 million.Let's be smart about how we scale this up so that we can drive to a cash flow positive situation together.
All right, Alex, thank you for this update.Please, everyone keep sending me your questions.I'm seeing a lot of questions come in from all of you.This is an interesting story that seems to be growing in the right direction.
So any questions you send me, I can put those in front of Alex and address those on future calls. Again, Alex Wiley, president and CEO of Volt Lithium, traded on the TSX Venture Exchange under the symbol VLT and on the OTCQB under the symbol VLTLF.
Alex, thanks for the update today.Thank you.
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